The majority of power and gas contracts rose week-on-week, as cooler temperatures and a recovery in EU ETS carbon supported prices. All near-term baseload power contracts rose, with day-ahead power recovering from recent declines, rising 9.1% to end the week at £46.8/MWh, a near one-month high. Nearly all seasonal power contracts rose, up 1.7% on average. Winter 19 and summer 20 contracts lifted 3.0% and 2.8% to £58.4/MWh and £49.1/MWh, respectively. Only winter 21 was lower week-on-week, slipping 0.5% to £54.1/MWh. Gas contracts experienced mixed movements, with nearly all near-term contracts, falling, whilst all seasonal gas contracts rose week-on-week. Day-ahead gas rose 6.7% to 37.3p/th, as cooler temperatures supported unseasonal demand, and a drop in flows from Norway left the gas system undersupplied. June and July 19 gas fell 1.4% and 1.7% to 33.3p/th and 34.1p/th, respectively. All seasonal contracts increased week-on-week, up 1.7% on average, with winter 19 gas climbing 2.6% to 54.9p/th. Brent crude oil prices fell for a second consecutive week, dropping 1.8% to average $70.3/bl. Concerns over the tightness of the global market remain, fuelled by the continuation of OPEC+ production cuts, sanctions on Iran and Venezuela further reducing available supplies, and contaminated oil supplies in Russia. API 2 coal prices lifted slightly, up 0.4% to average $70.4/t. Coal prices started the week at $69.7/t but rose to $71.0/t on 9 May. EU ETS carbon prices rose 2.9% to average €26.5/t this week.
Day-ahead power rose 9.1% to end the week at £46.8/MWh, a near one-month high amid forecasts of lower wind output and an uptick in gas prices.
June and July 19 power were up 1.5% and 1.2% to £43.5/MWh and £43.7/MWh, respectively.
Annual October 19 power increased 2.9% week-on-week to £53.7/MWh.
The contract is 4.3% lower than the same time last month (£56.1/MWh), and 9.8% higher than the same time last year (£49.9/MWh).
Forward curve comparison
Annual April Contract
Day-ahead peak power rose 14.0% to £49.0/MWh, £2.2/MWh above its baseload counterpart.
Day-ahead peak power is 13.3% lower than the same time last year when it was £56.5/MWh.
June and July 19 peak power were up 1.6% and 1.2% at £47.5/MWh and £48.0/MWh, respectively.
Annual October 19 peak power gained 2.8% to end the week at £59.5/MWh, £5.8/MWh above its baseload power counterpart.
The contract is 3.6% below its value this time last month (£61.7/MWh), and 6.5% above the same time last year when it was £55.9/MWh.
Forward curve comparison
Annual April contract
Seasonal power prices
Seasonal baseload power contracts
Seasonal baseload power curve
Seasonal power contracts rose 1.7% on average.
Winter 19 and summer 20 contracts lifted 3.0% and 2.8% to £58.4/MWh and £49.1/MWh, respectively.
Only winter 21 was lower week-on-week, slipping 0.5% to £54.1/MWh.
Seasonal peak power contracts rose 2.3% on average, with winter 19 peak power up 2.7% at £65.5/MWh.
On average, seasonal peak power contracts are 3.6% lower month-on-month.
Commodity price movements
Oil and Coal
Brent crude oil prices fell for a second consecutive week, down 1.8% to average $70.3/bl.
The US Energy Information Administration (EIA) released an updated price forecast for Brent crude oil this week, predicting Brent crude oil prices would average $69.6/bl in 2019 and $67.0/bl in 2020. The 2019 forecast is up 11% from the previous month due to predictions of a tighter than previously expected oil market this summer, as OPEC production in April fell to 30mn bpd, and is forecast to average 30.3mn bpd this year.
API 2 coal prices lifted slightly, up 0.4% to average $70.4/t. Coal prices started the week at $69.7/t but rose to $71.0/t on 9 May.
Coal prices have remained around $70/t for the past month, as demand across Europe remains relatively week due to the economic unattractiveness of coal compared to cheaper gas.
EU ETS carbon prices reversed last week’s fall, rising 2.9% to average €26.5/t.
Carbon prices rose towards €27/t early in the week, and peaked at $27.2/t on 9 May, a two-week high.
EUAs found support from unseasonably cool weather across Europe, pushing up power and gas demand and conventional-fired power generation.
The recovery in European gas contracts has also supported EUA buying, pushing up the price of carbon.
Wholesale price snapshot
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